Correlation Between American Shared and Concord Medical
Can any of the company-specific risk be diversified away by investing in both American Shared and Concord Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Shared and Concord Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shared Hospital and Concord Medical Services, you can compare the effects of market volatilities on American Shared and Concord Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American Shared with a short position of Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and Concord Medical.
Diversification Opportunities for American Shared and Concord Medical
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Concord is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Concord Medical Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Medical Services and American Shared is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American Shared Hospital are associated (or correlated) with Concord Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Medical Services has no effect on the direction of American Shared i.e., American Shared and Concord Medical go up and down completely randomly.
Pair Corralation between American Shared and Concord Medical
Considering the 90-day investment horizon American Shared is expected to generate 3.11 times less return on investment than Concord Medical. But when comparing it to its historical volatility, American Shared Hospital is 4.9 times less risky than Concord Medical. It trades about 0.27 of its potential returns per unit of risk. Concord Medical Services is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Concord Medical Services on January 25, 2024 and sell it today you would earn a total of 16.01 from holding Concord Medical Services or generate 39.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
American Shared Hospital vs. Concord Medical Services
Performance |
| Timeline |
| American Shared Hospital |
| Concord Medical Services |
American Shared and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shared and Concord Medical
The main advantage of trading using opposite American Shared and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared position performs unexpectedly, Concord Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Concord Medical will offset losses from the drop in Concord Medical's long position.| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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